What are my options for motor finance?
There are many different types of car loans to choose from – and as you’d expect, they all have pros and cons. You’ll find information on this site to give you a handy overview of the different options.
As with any kind of finance, deciding which is the right choice of car loan comes down to your specific financial circumstances and how you plan to use your car. If you’re not sure what’s best for you, we strongly advise you get professional advice from an accountant or financial advisor to help you decide.
1. Car Loan
Perhaps the most obvious motor finance option is a car or vehicle loan. The key feature of this kind of finance is that it is a secured loan, where you use your new car, motorbike, or other vehicle as collateral.
2. Personal Loan
If you don’t want to use your new car as security for your loan – or if you’re buying a second-hand car that’s more than six years old, you could opt for a personal loan instead to finance your new motor.
3. Mortgage
If you own a property and have built up some equity, you might be able to fund your car purchase by redrawing on your mortgage.
4. Hire Purchase
Hire purchase is very different from a car loan or personal loan. With this type of motor finance, YOU are not actually buying the car, and you won’t own it until the end of the contract.
5. Lease Finance
It’s basically a rental agreement – like with hire purchase, the finance company will buy the car for you and then lease it to you in exchange for regular payments over an agreed period.
As you can see, there are a lot of motor finance options to choose from. The most common choices are car loans and personal loans, both of which are easily accessible online.
If in doubt, seek professional financial advice to help you select the most suitable option for financing your new car.
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